LGA gets needed increas; Granite Falls set to receive notable bump

Thursday

May 30, 2013 at 2:06 PMMay 30, 2013 at 2:13 PM

After what city representatives have called several years of underfunded Local Government Aid (LGA) programming, an $80 million increase and new distribution formula in 2014 is expected to simplify and stabilize the program for the foreseeable future.

By Scott TedrickNews Editor

After what city representatives have called several years of underfunded Local Government Aid (LGA) programming, an $80 million increase and new distribution formula in 2014 is expected to simplify and stabilize the program for the foreseeable future.A bill outlining proposed changes recently passed both the House and Senate, boasting bi-partisan support from rural and metro legislators alike. “It’s just reflective of the need to stabilize the tax base for smaller communities throughout the state,” said Granite Falls City Manager Bill Lavin. “It makes it more stable so that you don’t see these large fluctuations that we’ve seen in the past.”LGA provides property tax relief to cities through direct payments from the state, and helps to ensure that equal levels of essential services are able to be provided to both urban and rural Minnesota cities at a reasonable costs.The bill is based off a proposal by Governor Mark Dayton to spend $506 million annually on LGA. But even though the change marks an $80 million increase, it is still $59 million less that what cities received overall in 2002.Between Granite Falls and Clarkfield, the City of Granite Falls is posed to prosper most significantly from the new LGA formula and funding. Based on information from a House research committee, Granite Falls will receive approximately $186,500 in LGA increases while Clarkfield will see a gain of approximately $12,000. The additions will raise the total allotment to the cities to approximately $904,500 for Granite Falls and $356,700 for Clarkfield for 2014. The dollar amounts account for approximately 32 percent and 51 percent of the cities’ general fund budgets, respectively.“Increases are obviously good. You never try and plan for increases you try and plan for decreases,” said City Administrator Scott Weske. “Regardless, it’s not going to make a big enough change where we would budget any differently at this point.”With a larger chunk of change to work with it would seem that Granite Falls is better positioned to apply the funds toward services or potential initiatives. According to Lavin, however, the most likely course of action will be to bank the increase, thereby bolstering the city’s budget reserve, which can help aid the city in keeping its strong A+ bond rating.“What we try to do when we see we’re getting more equalized funding is to be sure not to commit such monies to any long-term programs because of the fear that the funding could be removed next year,” he said. “There is the possibility of applying it to a one time purchase, but at this point there is not a need that demands that.”